Government appears split over EuroAsia Interconnector project’s possible financing

The Energy Minister appears a lot more positive than the Finance Minister over the financial viability of the ambitious EuroAsia Interconnector project – a subsea electricity cable connecting Cyprus to Crete.

This is what Philenews reported on Wednesday following a debate before the House Energy Committee the day before where Energy Minister Giorgos Papanastasiou and Finance’s Makis Keravnos had participated.

The two ministers took a distinctly different stand on the project which has run into financing problems – specifically on the state’s possible involvement. That is, whether to provide a guarantee for a €580 million loan or by participating directly in the investment.

The Finance Minister appeared quite cautious, avoiding taking a position for or against the electricity interconnection.  He had emphasized the need for the viability and usefulness of the project through an independent techno-economic study to be carried out first.

The Minister of Energy appeared confident about the economic viability of the interconnection and even more so about its geostrategic importance. He basically advocated the state’s participation in the share capital of the grand project.

EuroAsia – a private limited company registered in Cyprus – is the project promoter.

EuroAsia has applied to the European Investment Bank for a €580 million loan.

But recently it emerged that an external consultant hired by the EIB while not definitively giving the loan request the thumbs-down, voiced reservations about funding the project.